Synlait shares take a hammering
Troubled milk processor Synlait's share price is taking a hammering as nervous investors offload their stakes.
In a statement to NZX, Synlait says McGilvary will act in the position until the position is permanently filled and that he was elected with the full support of the board.
McGilvary thanked Robertson for his contribution to Synlait.
“We wish Simon well with his future endeavours.”
Synlait’s constitution requires the listed processor to have three independent directors.
Pending appointment of a new independent director, the constitution contemplates a situation where there may not be three independent directors in office. In those circumstances, the constitution requires that one Bright Dairy director abstains from voting on all resolutions put to a vote at a meeting of the board, until a third independent director is appointed to fill the vacancy.
The board confirms that one Bright director will abstain from voting on all resolutions with immediate effect until the vacancy is filled.
Bright Dairy of China owns 39% of Synlait. The other major shareholder is a2Milk (a2), which owns a 19.9% stake.
In recent years, the relationship between a2 and Synlait has soured. Last month a2 issued a notice to cancel exclusivity arrangements under the Nutritional Powders Manufacturing and Supply Agreement (NPMSA) for the a2 Platinum and other nutritional products. Under this deal, Synlait manufactured infant formula for a2.
Synlait disputes that a2 has the right to cancel the exclusivity arrangements.
Representatives of the companies engaged in a period of good faith negotiations, but the dispute remains unresolved. The matter will now enter a confidential and binding arbitration process.
Synlait continues to hold the Chinese regulatory State Administration for Market Regulation (SAMR) licence which is attached to Synlait’s Dunsandel manufacturing facilities.
The licence is for a2’s Chinese labelled infant formula (stages one, two and three).
The company expects to manufacture those products for a2, for products destined for the China market for the period of that licence – currently expiring September 2027.
